Comments on: Idea: ValueVision Media http://www.futureblind.com/2008/01/idea-valuevision-media/ A blog about business, investing, innovation and creative engineering. Mon, 02 Jan 2012 18:02:00 +0000 hourly 1 http://wordpress.org/?v= By: IPTV http://www.futureblind.com/2008/01/idea-valuevision-media/comment-page-1/#comment-88 IPTV Sun, 06 Jan 2008 23:15:32 +0000 http://www.futureblind.com/2008/01/idea-valuevision-media/#comment-88 Distribution costs were $112.4M in 2006 and likely approached $120M in 2007; the increase in distribution costs exceeded the sales growth. That plus increases in some variable costs contributed to the reduction in EBITDA guidance for 2007. Where can VV expect to reduce costs? Cost of Goods Sold currently 64.7%...opportunity to reduce to 62%...result +2.7% Operating expenses reduced by .5% to 1%...result + .75% (avg) Distribution costs currently 15%....reduced to 5% Expected margin in 09 is 13-14%....that equates to EBITDA of $3+/share in 09. How? The key is renegotiations with the MSO's. Why will they lower rate? Digital world is 100's of channels vs 75 in an analog world; ShopNBC sales are 30% internet growing by 18%. Review QVC annual report of 1994 for other reasons. Other: Would be great to see Comcast buy the GE/NBC stake....in return for favorable carriage on Comcast homes. Everyone would win in that scenario....how so....30% increase in sales for starters.... Distribution costs were $112.4M in 2006 and likely approached $120M in 2007; the increase in distribution costs exceeded the sales growth. That plus increases in some variable costs contributed to the reduction in EBITDA guidance for 2007.

Where can VV expect to reduce costs?
Cost of Goods Sold currently 64.7%…opportunity to reduce to 62%…result +2.7%
Operating expenses reduced by .5% to 1%…result + .75% (avg)
Distribution costs currently 15%….reduced to 5%

Expected margin in 09 is 13-14%….that equates to EBITDA of $3+/share in 09.

How?
The key is renegotiations with the MSO’s. Why will they lower rate? Digital world is 100′s of channels vs 75 in an analog world; ShopNBC sales are 30% internet growing by 18%. Review QVC annual report of 1994 for other reasons.

Other: Would be great to see Comcast buy the GE/NBC stake….in return for favorable carriage on Comcast homes. Everyone would win in that scenario….how so….30% increase in sales for starters….

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